I got pre approved for a conventional loan!!!

[neptunejcw]

Scores where Trans. 683 Eq.689 Ex.699. at 3.75... price of home is 239900, it will be a new construction. I'm kinda stomped on rather to do the 3% down I gota bring 15k to closing or 5% down 21k to closing...PMI is 1.14 at the 3%down & .89 with 5%down. The difference in payment is 3%down 1,658 & 5%down 1573...Give or take a few dollars I'm not sitting in front of the paperwork right now. But I'm glad I got approved for the conventional loan. I don't have to worry about refinancing to drop the pmi.....What your guys think 3%down or 5% down...I'd much rather be under 1600 a month but is throwing in another 5-6k worth me putting down to get below 1600 a month

[Anonymous]

"I'd much rather be under 1600 a month but is throwing in another 5-6k worth me putting down to get below 1600 a month"

Not in my view.  I'd pay it down on debt, or buy stuff to put in the new house.

[frugalQ]

i agree with Bamaguy.  

[TimeToRecover]

How long will you be in the home?  See when the break even point is.  if you will be in the home longer then the break even point then take the lower payment.  If not then take the higher payment.  

I did this on debating on buying down my interest rate.  I know that I will be refinancing within 2 years (when my foreclosure drops off) and I can change to conventional from FHA.  the break evne for me was 4 years so I did NOT buy down my rate.

[Anonymous]

Break even point is a good place to jump off. The other question is what you feel works better for you personally. Obviously the break even point gives you hard dollar facts. But it doesn't take into account real life. Do you have a better use of the extra money? Do you have furniture and furnishings for your new home, or do you need the capital to buy them? Is your income steady, or is there a chance of a non trivial raise in the future?

Does having more of your home already paid for make you sleep better at night, or does having more reserves in the bank do that? We could sit here and show what the actual dollar costs are each way, but everyone has somewhat different situations, comfort levels and need and wants. Allof the above advice is good, but thinking into the future is always a bit murky.

[Martis]

Congratulations on your approval!!!

I have a few questions for you if dont mind sharing with us.

I was under the impresion that I need 10% for conventional loan. I guess I was wrong?

When you say PMI 1.14 at 3% and .89 at 5% you mean aditional intrest to the the 3.75 so the acctual APR would be 4.89 or  4.64?

Once again congratulations! As many said is up to you and you personal situation is you would go the 3% or 5% route.

[Anonymous]

FHA might be cheaper.

[Anonymous]

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@Martis wrote:

Congratulations on your approval!!!

I was under the impresion that I need 10% for conventional loan. I guess I was wrong?

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I am closing tomorrow on a conventional mortgage loan with 5% down. I used a local lender but I know Quicken willl do 5% down as well. You do pay PMI (which is not tacked onto your APR but rather fee that's added monthly into your mortgage until you have 20% equity) and my loan had a 3.875% rate. Middle score was a 720. We rate locked and rates dropped another 1/8 of a point or so.

[madmann26]

The difference is $105/month.

If you eat out 6x per month and the average is $50/outting, then just eat out 4x per month. There is your difference in payment.

[neptunejcw]

No, if I go fha I still will have to refinance to get the pmi to drop...Ain't no telling what the rates will be...+ the fees are way cheaper with conventional & the interest rate is about the same